Mktg 13

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Marketing Channel (channel of distribution)

set of interdependent orgs that eases the transfer of ownership as products move from producer to biz user or consumer

Channel Members

all parties in the mktg channel who negotiate with one another, buy and sell products, and facilitate the change of ownership b/w buyer and seller in teh course of moving the product from the manufacturer into the hands of the final consumer

Discrepancy of Quantity

the difference b/w the amount of product produced and the amount an end user wants to buy

Discrepancy of Assortment

lack of all the items a customer needs to receive full satisfaction from a product(s)

Temporal Discrepancy

situation that occurs when a product is produced but a customer is not ready to buy it

Spatial Discrepancy

difference b/w the location or a producer and the location of widely scattered markets

Retailer

channel intermediary that sells mainly to consumers

Merchant Wholesaler

institution that buys goods from manufacturers and resells them to businesses, govt agencies & other wholesalers or retailers & that receives and takes title to goods, stores them in its own warehouses and later ships them

Agents & Brokers

wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers or manufacturers

Determining Type of Intermediary to Use

Product characteristics

Buyer considerations

Market characteristics

Logistics

efficient and cost-effective forward and reverse flow and storage of goods, services & related info into, thru, and out of channel member companies

Channel Functions(Chart on p. 205)

Transactional

Logistical

Facilitating

Direct Channel

distribution channel in which producers sell directly to consumers

Marketing Channels for Consumer Products

Direct

Retailer

Wholesaler

Agent/Broker

Channels for Biz & Industrial Products

Direct - Industrial & Govt. buyers

Industrial Distributor

Agent/Broker

Agent/Broker-industrial Distributor

Dual Distribution (Multiple Distribution)

use of 2+ channels to distribute the same product to target markets

Strategic Channel Alliance

cooperative agreement b/w BF's to use the other's already established distribution channel

Factors Affecting Channel Choice

Market Factors

Product Factors

Producer Factors

Product Factors

Delicacy of Product

Producer Factors

Producer Resources

# of Product Lines

Desire for Channel Control

Intensive Distribution

form of distribution aimed at having a product available in every outlet where target customers might want to buy it

Selective Distribution

form of distribution achieved by screen dealers to eliminate all but a few in any single area

EX: not everyone carries Epson printers

Exclusive Distribution

form of distribution that establishes one or a few dealers with a given area

EX: ferrari dealers in SA

Types of Channel Relationships

Arm's Length Relationship

Cooperative

Integrated

Social Dimensions of Channels

Power

Control

Leadership

Conflict

Partnering

Channel Power

capacity of a particular mktg channel member to control or influence the behavior of other channel members

Channel Control

situation that occurs when 1 mktg channel member intentionally affects another member's behavior

Channel Leader

member of a mktg channel that exercises authority/power over the activities of other members

Channel Conflict

clash of goals and methods b/w distribution channel members

Horizontal vs. Vertical Conflict

Horizontal: conflict on same level

Vertical: conflict b/w different levels in a mktg channel

Channel Partnering

joint effort of all channel members to create a channel that serves customers and creates a competitive advantage